SBY cracks down on oil smugglers
Muninggar Sri Saraswati, The Jakarta Post, Jakarta
President Susilo Bambang Yudhoyono has summoned PT Pertamina's board of directors to a meeting on Friday after police announced their findings on the involvement of the state oil and gas firm's officials in the smuggling of crude and refined oil, estimated to have resulted in annual losses to the state of Rp 8.8 trillion (US$850 million).
"I will meet with Pertamina directors tomorrow (Friday) to be held accountable for what has happened in the firm. This (eradication of oil smuggling) is important in order to deal with the (domestic) fuel problems apart from other policies," the president said after a limited Cabinet meeting on Thursday.
The authorities, Susilo said, would investigate possible involvement of Pertamina officials.
The Cabinet meeting was attended by, among others, National Police Chief Gen. Sutanto, Coordinating Minister for Political, Legal and Security Affairs Widodo Adi Sucipto, Coordinating Minister for the Economy Aburizal Bakrie and Minister of Energy and Mineral Resources Purnomo Yusgiantoro.
Susilo said that curbing oil smuggling has been his priority in helping to solve domestic oil problems.
"Many don't really believe that (oil) smuggling disrupts the security of our (oil) supplies, or that it has caused huge financial losses to the state."
Susilo said that the authorities have so far seized 17 ships along with 6,000 tons of diesel fuel and kerosene. A total of 58 people have been arrested -- including 18 Pertamina officials and five foreigners -- during the operations.
"What concerns me most is that this crime has cost the state Rp 8.8 trillion every single year. We must stop this," he said.
Indonesia has been hit hard by soaring oil prices, which are hovering around US$65 per barrel, and has now become a net oil importer. Costs for the fuel subsidy this year could reach up to Rp 119.4 trillion, according to latest estimates from Pertamina.
Sutanto said Pertamina officials would likely be charged with theft, oil smuggling and corruption, as well as violations of the oil and gas law.
He said that a smuggling network operating in East Kalimantan installed a seven-mile-long pipeline connecting the Lawe-lawe oil port to offshore.
"They did it at night, between 11 p.m. and 3 a.m. They took the oil and replaced it with sea water," Sutanto said, adding it only took about three hours to fill a 3,000-ton tanker.
The crude oil was supposed to be transported to the East Kalimantan and Cilacap oil refineries.
The network involves Pertamina officials and foreign nationals. Former Pertamina oil tanker captains are also involved in the crime.
Another smuggling network uncovered by the police operates in the Riau Islands. The network is allegedly responsible for 70 percent of oil smuggling activities in the western part of Indonesia.
"It involves both Indonesians and foreigners. We have informed CID," he said, referring to the Singapore Police Force's Criminal Investigation Department.
One of the five foreigners holds Chinese citizenship while the rest are Singaporeans.
The police have also uncovered other oil smuggling networks operating in Central Java, East Java and the eastern parts of Indonesia.